Report: 3PLs see small revenue boost in 2012, similar for 2013

Wednesday, May 22, 2013

Third-party logistics providers will see 2013 revenues of $148.4 million, an increase of 4.6 percent, according to a recently released report by Armstrong & Associates.
Revenues of third-party logistics providers in the United States increased by 6 percent, year over year, in 2012 to $141.8 billion.
According to Armstrong & Associates, the compound annual growth rate for the 3PL industry fell by 0.3 percent from 1996 to 2012. The company expects this downward trend to continue this year due to the impacts of sequestration.
The third-party logistics market has seen a steady revenue climb after a steep drop in 2009 to $107.1 billion. In fact, 2008’s result of $127 billion was only $300 million less than 2010’s revenues, showing that the 3PL industry fully bounced back from the recession. In the past decade, the 3PL industry has seen percent growth, jumping 99.4 percent from $71.1 billion in 2002 to its current value.
Breaking the market down into segments, domestic transportation management saw the biggest gains in 2012, with a 9.2-percent year over year rise in gross revenue, finishing the year at $45.1 billion. Net revenue of $6.6 billion represented growth of 5.4 percent, and net income ballooned by 16.7 percent, finishing the year at a 20.3 percent profit margin.
Value-added warehousing services saw their gross revenues rise by 5.3 percent to $35.8 billion, and dedicated contract carriage was up by 4.5 percent. The smallest revenue rise, 0.4 percent, went to the international transportation management business, which ended the year with 46.3 billion in revenues.
Although all the sectors saw gains in gross and net revenues, international management and dedicated contract carriage saw reductions in net income of 4.1 percent and 3.3 percent, respectively.
“The largest negative in 3PL segment results was international transportation management (ITM),” according to the report. “The results in ITM reflect the global economic malaise.” - Jon Ross